CPA May Be Disciplined for Actions Not Directly Related to Public Accountancy

Description

Appeals court held that a state
board of accountancy could impose discipline on a CPA who lied to her employer
about her marital status in order for her ex-husband to have medical insurance.
The deceit involved fiscal dishonesty for which discipline could be imposed.

Topic

Accountant’s Liability

Key Words

Discipline; CPA; Misrepresentation

C A S E
S U M M A R Y

Facts

Greenan, who is a CPA, worked at the Port of
Vancouver as an account manager. The rules of her health benefit plan required
her to notify her employer of any change in her marital status. Since she
failed to tell her employer when she got a divorce, the employer provided
health insurance for her former spouse for over four years before the fact
was uncovered. The cost to the employer was $1,000 a year. Told to file
a form to correct the matter, Greenan failed to insert the date her marriage
ended, instead only saying that insurance was to end that month for her
former husband. Told to provide the actual divorce date, she again failed
to do so. The Accountancy Board filed charges against Greenan as a result
of the matter. She was disciplined for fiscal dishonesty and misleading
misrepresentations while working as a CPA. She was ordered to take an ethics
exam, take an ethics course, pay a fine of $1,000 and cover the cost of
the Board's investigation. She appealed the Board decision.

Decision

Affirmed. The Washington State Board of Accountancy has jurisdiction
to discipline a licensed CPA working as an account manager, for misrepresenting
her former spouse's eligibility for health insurance, notwithstanding
that the violation did not involve misconduct in the practice of public
accounting. The disciplinary statute's plain language, statutory scheme,
and legislative history provided the Board with jurisdiction to discipline
Greenan for dishonesty, fraud, or negligence while representing herself
as a CPA, even while not performing public accounting.